Deobon Korea continues to experience a relentless downward trend. Since its listing, the company has been on a steady decline, and even CEO Baek Jongwon's announcement to halt his broadcasting activities has not reversed the weak performance of the stock. Overhang concerns have further compounded the situation, making a recovery in share price appear difficult.

According to the Korea Exchange on May 8, Deobon Korea closed at 26,400 won the previous day, down 2.04%. The stock has now fallen for three consecutive days, reaching its lowest closing price since its IPO in November last year.

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Deobon Korea's share price peaked at 64,500 won on its first day of trading on November 6, 2024, but has since been on a continuous decline. On April 9, the price dropped to an intraday low of 26,100 won, and on this day, it also fell to 26,100 won during trading. The current share price is 22.35% below the IPO price of 34,000 won. Since the beginning of this year, the stock has not recovered to its IPO price even once.

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Since its IPO, Deobon Korea has faced a series of controversies that have negatively impacted its share price. Issues have included product quality concerns, errors in country-of-origin labeling, hygiene problems at festival sites, and allegations of ingredient neglect. Most recently, the Gangnam Police Station in Seoul received a complaint that the company used Vietnamese shrimp in its 'Deopjuk' product while advertising it as 'domestic' and 'wild-caught,' allegedly providing false information. As a result, CEO Baek and the Deobon Korea corporation have been booked and are under investigation for violations of the Food Labeling and Advertising Act. In addition, police are investigating allegations that 'Paikdabang' misled consumers into believing the ingredients of its new 'Chewy Sweet Potato Bread' were domestically sourced, and that Deobon Korea used industrial metal cooking utensils at a local festival but presented them as if they were made of food-grade metal.

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In response, CEO Baek issued an apology on May 6. This marks his third apology, following previous statements on March 13 and 19 regarding false country-of-origin labeling and issues with ham and pork content. In his latest apology, delivered via a YouTube video, Baek stated, "Except for the programs currently being filmed, I will suspend all broadcasting activities," and added, "From now on, I will focus all my efforts on the growth of Deobon Korea as a businessperson, not as a broadcaster." On May 2, Deobon Korea also announced a franchisee support plan worth 5 billion won, including a three-month royalty exemption.

▲The number of Deobon Korea stores, which was around 500, surpassed 1,000 last year when its popularity peaked. The photo shows Deobon Korea stores located in the Hongdae commercial district.

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However, CEO Baek's announcement to halt broadcasting activities and the support plan have proven insufficient to stop the decline in share price. The ongoing weakness is further fueled by overhang concerns (potential shares to be sold). According to the Korea Securities Depository, with the expiration of the six-month lock-up period following the company's IPO in November last year, 4,865,835 shares (about 33.02%), including those held by Baek Jongwon and Kang Seokwon, have become eligible for sale. In addition, 282,600 shares that institutional investors had agreed to hold for six months can now be sold as of May 7.

The mandatory holding period for stock options granted to employees before the IPO in 2022 has also ended. According to Deobon Korea's business report, there are currently 854,860 unexercised stock options, accounting for 5.8% of the total issued shares (14,737,260 shares).